With no news this morning nor over the weekend, it was with little surprise that we saw an unchanged E trading screen upon arriving at the trading desk today. Export markets remained quiet over the weekend, and with many people on spring break this week, the Cotton futures market decided to take it's own spring break.
Prices opened a touch lower in the open outcry session, tracking around 10-15 lower for much of the morning. There looked to be absolutely no impetus in either the futures, spreads or options today, and before long the market was trading unchanged. If there was anything at all to report from today it was that options volatility again took a beating, tracking as low as 14.5% in May and 18.5% in July.
Even December volatility took a hit, settling at 20.5%. There was not a flurry of activity in the options though, with some May straddle selling and May/July calendar put spreading the only trades of real note. Prices fittingly settled right near unchanged, within a very low 7,511 contracts between the Electronic and open outcry sessions.
Tomorrow's spec hedge should show the specs with a largely increased outright long position. Having been the majority buyer over last week (into a ceiling of commercial selling) it wouldn't surprise us to see a spec long of between 6-8% of total open interest.
Technically the May contract is still attempting to consolidate higher, almost in begrudging fashion. Today's session took place above the 50 day moving average which warrants some consideration, but the lack of participation and the narrow session can't get us too excited just yet.
One thing that is very encouraging is that the 9 day moving average is converging on and about to overtake the 50 day average, suggesting some more spec involvement at higher levels.
Momentum wise prices are pointing higher, with the RSI at 56.44 which would well be aligned with the trend if prices continue to consolidate higher.